The

Economic Impact of Tourism in Wisconsin

April 2013

State Overview

Key themes for 2012

l The Wisconsin visitor economy continued to expand in 2012. Visitor spending within Wisconsin rose 4.7% after a 7.6% increase in 2011.
Visitor volumes rose for a second straight year, 96.6 million people visited Wisconsin in 2012. Day visitation rebounded in 2012 as gas price growth moderated. Spending rose in all major categories with transportation and recreation out-performing the overall visitor economy.

l Visitor spending of $10.4 billion generated $16.8 billion in total business sales in 2012 as tourism dollars flowed through the Wisconsin economy.

Key results
l Tourism is a substantial and growing driver of the Wisconsin economy and represents a significant source of business sales, employment, and taxes in Wisconsin. l Total tourism business sales of $16.8 billion in 2012 sustained 184,000 jobs, both directly and indirectly. l These jobs represent 7.8% of total private
employment in Wisconsin; 1 in every 13 jobs in the state is sustained by tourism activity. l Including indirect and induced impacts, tourism in Wisconsin generated $1.3 billion in state and local taxes and $975 million in Federal taxes last year. l In the absence of the state and local taxes generated by tourism, each Wisconsin household would need to pay $575 to maintain the current level of government services.
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Industry indicators
l Visitor trips to Wisconsin destinations grew 1.0% between 2011 and 2012. l Hotel room demand grew 1.9% (source: Smith Travel Research). l The average daily rate increased by 2.7% in 2012 helping grow overall hotel room revenue by 4.6% (source: Smith Travel
Research). l State sales tax on lodging properties grew 4.9% in 2012 (source: State Revenue Office). l Tourism-related employment growth outpaced overall state employment growth, growing 1.4% from the prior year.

Visitor Spending

Visitor spending
l Wisconsin visitor spending surpassed $10 billion in 2012, posting 4.7% growth after a 7.6% increase in 2011. l Strong day traveler growth pushed recreational spending up 7.0% in 2012.
Visitor Spending
Sector
Lodging Other Transport Air Food & bev. Retail Recreation TOTAL

2009
$2,147 $834 $384 $2,146 $1,850 $1,162 $8,522

(US$ Million) 2010 2011

$2,380 $957 $388 $2,252 $2,065 $1,155 $9,197 $2,564 $1,057 $405 $2,447 $2,200 $1,225 $9,898

2012
$2,664 $1,194 $408 $2,569 $2,221 $1,311 $10,367

% Change
3.9% 13.0% 0.8% 5.0% 1.0% 7.0% 4.7%

Tourism Industry Sales

US$ Billions 12 10
$ Billions
$8.5

9%
$9.2
$9.9 $10.4

8%
7%

8 6 4 2 0 2009
TOTAL

6%
5% 4%

3%
2%

1% 0% 2010 2011
% Change

2012

Source : Tourism Economics

Visitor spending by sector

l Travelers spent $2.6 billion on food & beverages and $2.1 billion in the lodging sector last year. The retail sector received $2.2 billion from visitors. l In 2012, visitor spending increased 7.0% on recreation and entertainment, 5.0% on food and beverage, and 3.9% on lodging.

$ Million, 2012 values shown

3,000 2,500
2,087

2,569
2,221

2011

2012

2,000
1,602

1,500

1,268

1,000
500

577

0
Recreation 2nd Home Rental Retail Transportation Lodging Food & bev.

Visitor spending by sector

l Strong growth in day stays with increased spending on recreation increased recreations share of the traveler dollar to 13%.
Recreation 13%

Visitor Spending by Sector

Retail 21% Food & bev. 25%

Air 4%

l
The share of the traveler dollar spent on lodging, the largest sector, remained level at 26% in 2012. l Food & beverage spending ranks second, capturing a quarter of visitor spending., followed by retail at 21%.

Other Transport 11%

Lodging 26%

Source : Tourism Economics

Visitor spending by sector

Wisconsin's Visitor Spending
by Year, Billions of $
$12

$10

$1.2
$8

$1.3 $2.2
Recreation Retail

$1.2 $1.2 $1.8 $2.1 $0.4 $0.8 $2.1 $2.1 $2.2

l Visitor spending has grown an average of 6.8% annually since 2009.

$6

Food & bev.

$2.3 $0.4 $1.0 $2.4

2010

$2.4 $0.4 $1.1 $2.6

2011

$2.6 $0.4 $1.2 $2.7

2012

Air Other Transport

Lodging

$4

l Lodging sales have increased 24% from the low seen in 2009.

$2

$0 2009

Source: Longwoods International, Tourism Economics, OTTI

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Visitor spending by market segment

l Leisure tourism represents more than 88% of visitor spending in Wisconsin. l Overnight visitors spend $7.1 billion in Wisconsin, 68% of the total. l Domestic visitors to Wisconsin spent $9.8 billion in 2012, 94% of all visitor spending.

Visitor Spending in 2012
(US$ Billion)

Purpose
Business Leisure Total $1.2 $9.2 $10.4

Stay
Day Overnight Total $3.3 $7.1 $10.4

Market
Domestic Overseas Canada Total $9.8 $0.5 $0.1 $10.4

Purpose
Business Leisure 11.6% 88.4%

Share Stay
Day Overnight 31.8% 68.2%

Market
Domestic Overseas Canada 94.1% 5.2% 0.7%

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Visitor spending by market segment

100% 90% 80% 0.7%Canada 5.2% Overseas

Percentage distribution

70% 60% 50% 40% 30% 20% 10% 0% Purpose Business 11.6% Leisure 88.4%

Overnight 68.2%

Domestic 94.1%

Day 31.8%

Stay

Market

Source : Tourism Economics

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State Tourism Impacts

How visitor spending generates impact

Travelers create direct economic value within a discreet group of sectors (e.g. recreation, transportation). This supports a relative proportion of jobs, wages, taxes, and GDP within each sector. Each directly affected sector also purchases goods and services as inputs (e.g. food wholesalers, utilities) into production. These impacts are called indirect impacts.

Lastly, the induced impact is generated when employees whose incomes are generated either directly or indirectly by tourism, spend those incomes in the state economy.

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Tourism sales by industry

Business

Day

15

Tourism sales by industry

l All business sectors of the Wisconsin economy benefit from tourism activity directly and/or indirectly. l Sectors that serve the tourism industry, like business services, gain as suppliers to a dynamic industry.
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$ million 3,500 3,000 2,500 2,000

Tourism Sales by Industry

Induced Indirect Direct

1,500
1,000

500
0

Personal Serv.

Gas

Bus. Services

Education

Other Transp

Air Transport

Lodging

Retail Trade

Recreation

Manu

FIRE

F&B

Total tourism employment

Tourism Economy Employment
Direct
Agriculture, Fishing, Mining Construction and Utilities Manufacturing Wholesale Trade Air Transport Other Transport Retail Trade Gasoline Stations Communications Finance, Insurance and Real Estate Business Services Education and Health Care Recreation and Entertainment Lodging Food & Beverage Personal Services Government TOTAL Growth Rate 1,794 2,175 15,425 1,589 3,445 445 24,014 32,288 46,859 2,363 130,396 1.4%

Indirect Induced
326 925 1,277 603 16 1,472 225 19 1,001 4,194 7,891 82 1,257 44 2,420 1,321 917 23,991 1.4% 231 312 534 906 26 605 4,242 292 416 4,065 2,554 7,004 899 37 4,515 2,406 362 29,406 1.0%

Total
557 1,237 1,810 1,510 1,836 4,251 19,892 1,900 1,418 11,703 10,890 7,086 26,170 32,369 53,794 6,091 1,279 183,794 1.4%

The tourism sector directly and indirectly supported 183,794 jobs, or 7.8% of all employment in Wisconsin last year.

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Total tourism employment

l Tourism is an employment intensive industry with particularly high job creation in the restaurant, hotel, and recreation sectors. l Secondary benefits are realized across the entire economy through the supply chain and incomes as they are spent.
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Tourism Employment by Industry Thousands

60 50 40 30 20
10 0

Induced Indirect Direct

Significant indirect and induced benefits

F&B

Recreation

Education

Gas

Personal Serv.

Other Transp

Air Transport

Lodging

Retail Trade

FIRE

Bus. Services

Manu

Day

Tourism employment intensity

l Tourism is a significant part of several industries 92% of lodging, 35% of recreation, and 22% of food & beverage employment is supported by tourism spending.

Tourism Employment Intensity by Industry

Lodging 92%

Recreation

35%

Retail

4%

Food & bev.

Business

22%

Day

Total 0%

4%

20%

40%

60%

80%

100%

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Tourism personal income

Tourism Labor Income (Compensation)
(US$ Million)

Direct
Agriculture, Fishing, Mining Construction and Utilities Manufacturing Wholesale Trade Air Transport Other Transport Retail Trade Gasoline Stations Communications Finance, Insurance and Real Estate Business Services Education and Health Care Recreation and Entertainment Business Lodging Food & Beverage Personal Services Government TOTAL Growth Rate 103.2 104.1 330.7 40.0 57.4 20.4 388.8 600.3 729.4 74.8 2,449.3 3.07%

Indirect
3.8 67.2 72.8 40.8 0.9 67.2 6.3 0.5 52.0 132.8 351.7 2.9 21.8 0.6 36.8 54.0 68.8 980.9 3.05%

Induced
3.4 24.0 30.7 61.4 1.4 26.5 113.0 7.2 23.5 132.5 114.0 360.7 14.0 0.6 77.3 67.1 24.5 1,081.8 3.25%

Total
7.2 91.2 103.6 102.2 105.5 197.7 450.0 47.7 75.5 322.8 486.1 363.6 424.6 601.5 843.5 196.0 93.3 4,512.0 3.11%

Day

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Tourism personal income

l The larger employment numbers in F&B and recreations support significant labor income in those industries. l Business services and the FIRE (finance, insurance and real estate) sectors depend on tourism activity as suppliers to tourism companies and their employees.
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$ million 900 800 700

Tourism Labor Income by Industry

Induced

Indirect

600
500 400 300 200 100 0Day

Direct

Significant indirect and induced benefits

Personal Serv.

Bus. Services

Education

Air Transport

Manu

Wholesale Tr.

Lodging

Recreation

FIRE

F&B

Other Transp

Retail Trade

Tourism tax generation

Traveler Generated Taxes
(US$ Million) Tax Type
Federal Taxes Subtotal Corporate Indirect Business Personal Income Social Security State and Local Taxes Subtotal Corporate Personal Income Sales Bed Property Excise and Fees State Unemployment TOTAL

2010
917.6 81.9 104.8 212.6 518.2 1,202.1 113.2 101.9 425.3 72.7 370.9 108.5 9.6 2,119.6

2011
944.5 87.4 112.0 216.8 528.4 1,269.8 120.9 103.9 453.1 77.3 391.7 Day 113.0 9.8 2,214.3

2012
976.9 91.5 117.1 223.5 544.8 1,312.1 126.5 107.2 473.4 80.9 397.8 116.4 10.1 2,289.0

l Taxes of $2.3 billion were directly and indirectly generated by tourism in 2012. l State and local taxes alone tallied $1.3 billion.

Business

l Each household in Wisconsin would need to be taxed an additional $575 per year to replace the tourism taxes received by state and local governments.

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Tourism tax generation state & local government

Traveler Generated Taxes - State and Local Government Revenues
(US$ Million) Tax Type
State Tax Subtotal Corporate Personal Income Sales Lodging Property Excise and Fees State Unemployment Local Tax Subtotal Corporate Personal Income Business Sales Lodging Property Excise and Fees State Unemployment

Total
705.9 126.5 107.2 438.0 0.0 0.0 24.2 10.1 606.2 0.0 0.0 Day 35.4 80.9 397.8 92.1 0.0

l Of the $1.3 billion collected by state and local governments in 2012 from traveler activity, $706 million (54%) accrued to state government. l
Local government revenues from visitor activity grew to $606 million. l Property tax revenue along with local excise and fees and lodging taxes comprise the major revenue streams for local governments.

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Methodology and Background

Why quantify the tourism economy?

l By monitoring tourism s economic impact, policy makers can make informed decisions regarding the funding and prioritization of tourism development. l It can also carefully monitor its successes and future
needs. l In order to do this, tourism must be measured in the same categories as other economic sectors i.e. tax generation, employment, wages, and gross domestic product.

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What is this a challenge?

l Most economic sectors such as financial services, insurance, or construction are easily defined within a country s national accounts statistics. l Tourism is not so easily measured because it is not a single industry. It is a demand-side
activity which affects multiple sectors to various degrees. l Tourism spans nearly a dozen sectors including lodging, recreation, retail, real estate, air passenger transport, food & beverage, car rental, taxi services, travel agents

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Methods and data sources

Domestic visitor expenditure estimates are provided by Longwoods Internationals representative survey of US travelers. These are broken out by sectors (lodging, transport at destination, food & beverage, retail, and recreation), by purpose (business and leisure), and by length of stay (day and overnight). Tourism Economics then adjusts these levels of spending based on a range of known measures of tourism activity: Overseas visitor spending (source: OTTI, TE) Canada visitor spending (source: Statistics Canada, TE) Bed tax receipts Spending on air travel which accrues to all airports and locally-based airlines Gasoline purchases by visitors (source: TE calculation) Smith Travel Research data on hotel revenues Construction Value by McGraw-Hill Construction Industry data on employment, wages, GDP, and sales (source: BEA, BLS, Census)

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Methods and data sources

An IMPLAN model was compiled for the State of Wisconsin. This traces the flow of visitor-related expenditures through the local economy and their effects on employment, wages, and taxes. IMPLAN also quantifies the indirect (supplier) and induced (income) impacts of tourism. All results are benchmarked and cross-checked and adjusted based on the following: US Bureau of Labor Statistics and Bureau of Economic Analysis (employment and wages by industry)

US Census (business sales by industry)

The source of the employment and wage data is the Regional Economic Information System (REIS), Bureau of Economic Analysis, U.S. Department of Commerce. All employment rankings are based on Bureau of Labor Statistics (ES202/QCEW) data.

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Selected recent economic impact clients

Associations / Companies Center for Exhibition Industry Research (Economic Impact of Visa Restrictions) DMAI (Event Impact Calculator for 80 CVBs) US Travel Association (Impact of travel promotion) InterContinental Hotels States California Georgia Maryland New York North Carolina Ohio Pennsylvania Wisconsin Cities Baltimore, MD Columbus, OH Kansas City, MO London, United Kingdom New York City Omaha, NE Orlando, FL Philadelphia, PA Pittsburgh, PA Rockford, IL Countries / Provinces Bahamas Bermuda Cayman Islands Dubai Ontario Canada St. Lucia United Kingdom

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About Tourism Economics

Tourism Economics, headquartered in Philadelphia, is an Oxford Economics company dedicated to providing high value, robust, and relevant analyses of the tourism sector that reflects the dynamics of local and global economies. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market strategies, project feasibility analysis, tourism forecasting models, tourism policy analysis, and economic impact studies. Our staff have worked with over 100 destinations to quantify the economic value of tourism, forecast demand, guide strategy, or evaluate tourism policies. Oxford Economics is one of the world s leading providers of economic analysis, forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford University s business college, Oxford Economics is founded on a reputation for high quality, quantitative analysis and evidence-based advice. For this, it draws on its own staff of 40 highly-experienced professional economists; a dedicated data analysis team; global modeling tools; close links with Oxford University, and a range of partner institutions in Europe, the US and in the United Nations Project Link. For more information: info@tourismeconomics.com.

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For more information: Adam Sacks, President
adam@tourismeconomics.com

Christopher Pike, Senior Economist cpike@tourismeconomics.com

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